OSIPP Discussion Paper: DP-2008-E-012 Regional Integration in Asia and Its Effects on the EU and North America December 26, 2008 Hiro Lee Professor, Osaka School of International Public Policy, Osaka University Robert F. Owen Professor, Institute of Economics and Management of Nantes, University of Nantes Dominique van der Mensbrugghe Senior Economist, The World Bank [Keywords] Regional integration, FTA, East Asia, welfare effects, CGE model [JEL codes] C68, F15, F17 [Abstract] Consequences of free trade agreements (FTAs) among the ASEAN+3 coun- tries and ASEAN+6 countries are explored using a dynamic computable general equili- brium (CGE) model. Quantitative assessments of intra and extra-regional effects on welfare, trade and output are offered. When both trade facilitation and endogenously determined productivity are included in the FTA scenarios, Singapore, other ASEAN countries and China would be able to realize relatively large welfare gains, while the welfare effects on the EU and North America are negligible. The trade and output effects on the latter two regions are also relatively small, with the notable exception of crops, other than rice, in North America. Correspondence to: Hiro Lee, OSIPP, Osaka University, 1-31 Machikaneyama-cho, Toyonaka, Osaka 560-0043, Japan. Email: hlee@osipp.osaka-u.ac.jp